abas ERP | Material Cost Posting

Material cost posting

Material cost posting determines the consumption of raw, auxiliary and operational materials, and posts the inventory changes of semi-finished and finished products. Valuation ensures that objects are created for all costing and relevant production processes. These objects form the basis for posting costs.
Valuation is the central link between production and accounting. Different valuation methods are available to valuate production processes. A valuation method consists of a valuation type for the stock receipt and the stock issue.

Valuation types for products

Stock receipt:
  • Transaction price
  • Planned price
  • Zero valuation
Stock issue:
  • Price of receipt
  • LIFO (last in, first out)
  • FIFO (first in, first out)
  • Mixed price
  • Warehouse group mixed price

Flexible selection with cost entry suggestion
The cost entry suggestion can be used to select valuations resulting from stock movement journal entries or completion confirmation journal entries based on various criteria. The selected posting documents and their total are displayed in a table.

Work in process stock
abas determines the usage of raw, auxiliary and operational materials, and assemblies of finished products and WIP. Stock changes that result from the consumption can be posted.

Valuation of products at transaction price
Finished products can be valued at transaction price when they are received in the warehouse from production. Direct material and production costs can be posted in a differentiated manner. The overheads, along with the direct costs, are adopted in the cost entries for the change in stock.

The posting of overheads allows you to display WIP and finished product stock levels (including overheads) valued at the manufacturing costs. If the valuation type transaction price is used for finished products, WIP will be managed by the ERP system automatically without differentiation. Externally procured parts can also be valued for the transaction price. In this case, the transaction price is the invoice price, which will be used to value a stock receipt.

Revaluation of additive costs through cost allocation
Causal relationships can be created in abas ERP, independent of time or a direct (technical) process reference. This requires all receipts and issues to be linked. Using cost allocations, additive costs such as freight or customs can be subsequently assigned to a process. The revaluation function forwards these additive costs to the affected processes later on, so they are available for evaluations such as the final costing.

Mapping of material provided to vendors
The values of material provided to vendors are displayed when posting the incoming invoice. Costs of services associated with the materials provided can be posted on a subcontracting account. An additional posting displays the value of the purchased product plus the material value of the ordered product, as the stock increases to the product stock account.

Subcontracting and material cost posting
The subcontracting value is recorded when the receipt invoice is posted. The service will also be posted to a subcontractor account here. Additionally, the subcontracting value (including provided materials) will be posted as a stock receipt in the stock account. On withdrawal from subcontracting, the stock issue value is posted under work in progress (WIP).

Quantity revaluation
Quantity revaluation is used for the subsequent editing of valuation prices. The entire value history is maintained, meaning that the cost originator and reason for the price change remain fully traceable.
A quantity revaluation can be used to increase or decrease valuations of stock levels or products after stocktaking.

Useful evaluations
In the interests of improving visibility and clarity, a number of useful evaluations list the valuation and posting results for material and production cost postings:
  • With the costs of a work order info system, you can determine progress and exact costs of a key date for individual work orders
  • You can use the WIP on key date function to determine the stock level of the WIP on a specific key date
  • The stock value on key date info system determines the stock value on a specific key date. Based on the valuations, the stock value can be determined based on various criteria
  • The valuation reference info system can be used to evaluate the valuation database using a number of selection criteria
  • The production activity info system evaluates the production costs per work center, cost center or cost object for a period. 
Purchasing and sales packing slips, for which an invoice will be created at a later date, can be posted to an interim account. For this account, an info system will provide a notification for all delivered products that have not been invoiced yet for a key date.